Challenges Faced by Infrastructure Companies in India's Road Projects
The National Highways Builders Federation (NHBF) has brought to light critical challenges faced by infrastructure companies involved in road projects managed by the National Highways Authority of India (NHAI). These challenges primarily concern the Hybrid Annuity Model (HAM) and Engineering, Procurement, and Construction (EPC) contracts, which are crucial for India's highway infrastructure development.
While the NHBF acknowledges recent improvements by NHAI aimed at enhancing transparency, efficiency, and fairness in project execution, it emphasizes that several key challenges remain unaddressed. These unresolved issues, according to the Federation, continue to cause delays and increase financial burdens on concessionaires, threatening the timely completion of projects.
One major concern is the recent shift in NHAI's working dynamics, particularly the referral of routine contractual issues to a Sole Conciliator. This practice puts pressure on concessionaires to surrender legitimate claims in exchange for approvals, undermining confidence and hampering the ease of doing business.
Another critical issue is NHAI's practice of inviting bids without securing necessary approvals beforehand. This often leads to pre-bid uncertainties, resulting in delays and additional burdens on concessionaires. The NHBF stresses the importance of having all approvals in place before bidding begins to reduce risks and streamline project execution.
Post-agreement challenges also pose significant problems. Concessionaires are often burdened with securing clearances and land acquisitions, tasks that should be managed by NHAI. The NHBF calls for NHAI to take a more proactive role in these areas to reduce operational strain and prevent further delays.
Financial strain due to delays is another key issue. Concessionaires often face ongoing financial commitments because of NHAI's inaction, even before projects commence. The NHBF urges NHAI to act promptly to prevent such delays and mitigate their financial impact.
Furthermore, the demand for additional work at rates not covered in the original contract, and the exploitation of ambiguous contract scopes, are seen as further strains on concessionaires' resources.
Delays in issuing No Objection Certificates (NOCs) and Completion Certificates (CCs) also cause financial losses for concessionaires. The NHBF urges NHAI to streamline these processes to prevent such losses.
The NHBF emphasizes the need for NHAI to address these critical challenges promptly and effectively to ensure the smooth and timely completion of road projects, which are vital for India's infrastructure development.